≈ Good luck betting on a bear market anytime soon≈
Traders,
There isn’t always a direct link between the economy and the stock market, but historically stocks have a tailwind when the economy is rockin’. This sentence is neither earth-shattering nor illogical. And yet, some will say that the stock market has already priced in the post-pandemic boom. Maybe the market has already looked far into the future and has priced-in all of the growth already.
I doubt it, though. That thinking seems a touch too clever. Goldman Sachs put out a forecast calling for 8% economic growth in 2021. The long-run average is only 3%, so we’re talking about a RED HOT economy here. They also expect the unemployment rate to sink to 4% by year-end.
I find it incredibly difficult to bet on bears ravaging equity prices while they’re so much goodness transpiring on Main Street. It’s not impossible, but it sure doesn’t square up with history. So says today’s Chart of the Day.
And besides, if you care about Technical Analysis and the messages being broadcast by price charts, you can’t possibly be discouraged.
#TeamTackle
Chart of the Day
When Main Street parties, Wall Street does too.
Today’s chart shows the general relationship between stocks and real GDP growth. When GDP is hot, stocks tend to be too. Analysts are all upping their forecasts for just how rosy the economy will be throughout 2021 and 2022. Next time a bear comes to you, tell him to stick that in his pessimistic pipe and smoke it.
Video of the day
Analyzing Big Cap Tech
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